Five Questions With: Margaret Hartigan

Margaret Hartigan, CEO of Providence financial-technology company Marstone, spoke at a panel event as part of Boston FinTech Week, on developing a New England fintech community. She says Providence is of great value as part of this broader effort.

PBN: In the Boston speech, it was said the New England fintech community believes Rhode Island has an important role in a fintech corridor, with Boston a hub and Providence a node of connection. Can you explain?

HARTIGAN: We’re seeing a huge rise in smaller cities, where people, especially younger folks, want to avoid the higher cost of living. Providence has a tremendous pool of talent through its rich higher education offerings … and it’s also a diverse city with a strong creative and artistic presence.

We also benefit from out-of-the box thinking and avoid the group-think mentality that’s sometimes common in larger cities. But Boston is only an hour’s drive away, so we still benefit from that proximity and the fact that Boston is one of the two financial capitals in the U.S., with a large concentration of banks, insurers, and other companies we want to partner and do business with. In many ways, we also consider ourselves as a node to New York.

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PBN: What does current fintech look like, beyond ATMs and online banking?

HARTIGAN: Current fintech is very single-product or very point-of-transaction focused – online payments, roundup savings accounts, online mortgages, etc. – which are important advancements. I believe that the future of the industry will more holistically address these points-of-service, focusing more on the client and the client need versus a product-centric experience.

PBN: What are some challenges, if any, in fintech’s advancement?

HARTIGAN: Digital solutions are often approached with an individual product line or business function in mind rather than a ubiquitous digital experience. This creates challenges as solutions then do not integrate seamlessly with other parts of a bank or investment firm, making for a very clunky and disjointed user experience.

Startups typically speak in terms of disruption, which is very appropriate for many industries. But when dealing with a highly regulated industry [such as] finance, there needs to be better coordination with the legacy systems running the majority of institutions. One of the biggest challenges is the “go-it-alone” attitude – fintechs trying to license their technology to big companies without integrating into existing systems.

PBN: When the general population thinks of financial services and technology, do cybersecurity fears creep in? How will that be avoided?

HARTIGAN: I think that cybersecurity is a fear, but people have consistently become more open to interacting with their finances electronically over the years. I think the bigger consumer fears surround privacy: Who has access to my data and what are they doing with it? Trust is a huge component to any relationship and that is compounded when you incorporate things that people typically are anxious about, i.e., their finances and technology.

PBN: A recent Forbes article on fintech initiatives says, “Large institutions must consider how they can move quickly to address consumer needs in an industry on the cusp of change, either through partnerships, acquisition, or internal initiatives. Most firms are taking a hybrid approach.” What are your thoughts on that, and what might a hybrid approach look like?

HARTIGAN: Large institutions will never be able to innovate as quickly as a startup, as it is not in their core DNA. Similarly, though, startups will never be able to replicate all the back-end technology that currently powers much of the large institutions. There is a general understanding that the partnership model allows the best of both worlds, especially in the age of competition.

Susan Shalhoub is a PBN contributing writer.